Ordinarily, this would have been the third of three consecutive ‘off’ weeks intended to restore the $250+ per week pace of investment. The ‘off’ weeks became necessary with the creation of a $1,000 position in SJW Group on April 15th. However, my account is being transitioned from TD Ameritrade’s platform to that of Charles Schwab next weekend. The account will not be accessible during that time. So, instead, I am letting next weekend be the third and final ‘off’ week.
This week, four of the portfolio holdings ranked in the Top 10: FMCB, PPG, SJW, and TGT.
| Ticker | Account Value |
| FMCB | 3,033.00 |
| PPG | 2,525.48 |
| SJW | 1,055.07 |
| TGT | 1,580.40 |
But guess what? None of the above matters because it is time to add a new position to the Portfolio for the Ages!
First, I implore you to read my previous two posts that address closing out the position in MMM and rolling that money into LEG and selling covered calls on LEG as well. These portfolio moves will leave the portfolio with no stocks in the Industrials sector. That is a sector imbalance that leaves Industrials as the only eligible sector for investment at this time. As luck would have it, the number one company in this week’s Top 10 is a small cap industrial.
Gorman-Rupp Company
Here is the profile from Yahoo! Finance:
The Gorman-Rupp Company designs, manufactures, and sells pumps and pump systems in the United States and internationally. The company’s products include self-priming centrifugal, standard centrifugal, magnetic drive centrifugal, axial and mixed flow, vertical turbine line shaft, submersible, high-pressure booster, rotary gear, diaphragm, bellows, and oscillating pumps. Its products are used in water, wastewater, construction, dewatering, industrial, petroleum, original equipment, agriculture, fire suppression, heating, ventilating and air conditioning, military, and other liquid-handling applications. The company markets its products through a network of distributors, manufacturers’ representatives, third-party distributor catalogs, direct sales, and e-commerce. The Gorman-Rupp Company was founded in 1933 and is headquartered in Mansfield, Ohio.
When I read a profile like the one above, I giggle in wonder like a flibbertigibbet. In a world where there are companies designing, building, and selling such essential work-horse components and products such as Gorman-Rupp Co [GRC], just how can society place any value at all on something like Bitcoin?
The Details
Data as of 2024-05-05
| Name | Gorman-Rupp Co |
| Ticker | GRC |
| Website | Investor Relations |
| Sector | Industrials |
| Dividend Streak | 51 years |
| Last Price | $32.71 |
| Div Amt (quarterly) | $0.18 |
| Ann Dividend | $0.72 |
| Last Ann Div Inc | 2.9% |
| Dividend Yield | 2.2% |
| Payout Ratio (ttm) | 51.0% |
| Beta (5-yr, mon) | 0.91 |
| P/E Ratio (ttm) | 19.71 |
| Margin of Safety | 10.0% |
Reasons to Invest
First, the dividend yield of 2%+ is rarely seen for this stock; they went from 2010 through 2022 with a sub 2% yield. It is also a safe yield with a 51% payout ratio.
Second, it sold off by about 15% after their 2024Q1 earnings announcement. This can be attributed to the revenue miss. But earnings of $0.30 came in $0.05 higher than 2023Q1. The price has since bounced back a little and there’s probably about 10% upside to fair value.
Third, GRC gives us exposure to the Industrials sector.
Establishing a position in GRC for approximately $1,000 means purchasing 31 shares on Monday.